jml.jordan2010 wrote:
When you used the 'Erase All Content & Settings' option under Settings > General > Reset, that wipes the device clean and sets it up as new without Activation Lock. That's why it makes you put in your Apple ID password, for whatever Apple ID is used on the device under Settings > iCloud.
The problem is it does not make me put in my Apple ID upon setup.
That's not a problem. That's how it is supposed to work. When you have Find My iPhone enabled, and when you erase the device properly (e.g., you use the Erase All Content & Settings option), the FMiP & Activation Lock are REMOVED once you enter your Apple ID password to authorize the process.
Without the Apple ID & password, any other method of erasing the device (e.g., Recovery Mode or DFU Mode) does NOT remove Activation Lock. When that happens, you'll have the screen you posted that requires the Apple ID & Password to be entered.
If you erase the device using Erase All Content & Settings or iTunes Restore (which requires you to turn off FMiP first) or the FMiP remote wipe & remove from account, you remove Activation Lock.
If you erase the device using Recovery Mode or DFU Mode or the Remote Wipe option via Find My iPhone, you do not remove the Activation Lock.
A thief will not have access to your Apple ID password, unless you kept that in a Note on the iPhone.
Nothing is wrong with this system. It's working as designed.
I hope this clears up your confusion.